The Norman Transcript

January 28, 2014

Norman City Council considers mingling PSST with general fund

By Joy Hampton
The Norman Transcript

NORMAN — The Norman City Council redefined how the Public Safety Sales Tax renewal would work at its Monday study session. The PSST, in its current form, wouldn’t really exist under the new proposal, which would put the money into the general fund and track it as a line item.

The council said mingling the PSST fund with the general would not allow for other uses of the money, and the city still would have to follow the same guidelines. The PSST Oversight Committee would continue to monitor and have input on how the special sales tax is spent.

However, how the extra jobs currently funded by the PSST will be protected long term is unclear in the new proposal.

Public input and recommendations from the PSST oversight committee pointed to disagreement between an April or August vote and whether the tax should be temporary or permanent.

City leaders said the changes represent an attempt to respond to those concerns.

Monday, city attorney Jeff Bryant presented two new proposals with new elements based on requests from council members.

Both versions still incorporate funding for the 71 jobs already funded under the PSST.

The new proposals will add 13 school resource officers in partnership with the schools, which would cost share the salaries, as well as adding four communications officers and two emergency vehicle mechanics.

The identified capital projects also remain in the new proposals, but the administration would differ. 

Version 1 of the new proposals would  make the tax permanent. In Version 1,  the half-percent tax continues until the capital projects are complete.

After those obligations have been met, the funds would be split. The proposal would delegate three-eighths percent to fund salaries and one-eighth percent to fund capital projects — to be tracked separately in the general fund and in the capital fund.

That split would continue regardless of whether the three-eighths percent is enough to fund the salaries or far more than is needed to fund salaries. By delegating those funds in this manner, the city loses the flexibility to prioritize salaries over capital projects.

Additionally, the general fund would have to pick up the excess cost of the salaries if three-eighths percent is not enough to fund them.

Projections by City Finance Director Anthony Francisco indicate that three eighths of a percent are unlikely to underwrite the full cost of those salaries and benefits in the long-term future.

Despite recent positive sales tax trends, sales tax is historically volatile. Currently, the city has eliminated positions vacated through attrition that some people would like restored — such as parks maintenance positions lost during the hiring freeze following the recession.

Council member Tom Kovach said he thinks the finance director’s estimates on the three-eighths funding is conservative and that the strong tax growth in Norman will support those salaries.

Kovach also thinks that identifying money for capital improvements will increase flexibility and prevent future concerns by council members on how PSST money can be used.

City leaders say the proposals advanced in Version 1 at Monday’s meeting do not represent a big change from the original version of the PSST renewal proposal.

The biggest difference in Version 2 is making the one-eighth percent designated for capital projects temporary. That version would make the three-eighths percent permanent and the one-eighth percent for capital funds temporary.

However, the split might not stand up to a legal challenge if those proposals were put on the same ballot, and most council members did not support those changes.

In Version 2, public safety positions would only be funded through Year 2 and the general fund would subsidize those positions after that, according to city staff reports.

“My numbers don’t show that,” Council member Robert Castleberry said. “My numbers show the positions would be supported through Year 10.”

Right now, the city has $4.5 million in carryover, and by the end of the first seven years of the PSST, the fund could have as much as $9 million, Castleberry said. Some of that is being held back to protect those 71 salaries in case the renewal measure doesn’t pass, but once it passes, that money will be freed up, Castleberry said.

In Version 2, the money should be kept separate, Castleberry said, though it also could be tracked within the general fund. He supports keeping the tax as a designated public safety fund.

Most of the support voiced by the city council was for Version 1, but many questions remain.

“I like a lot of each of these (proposed versions),” Council member Chad Williams said. “The temporary lets us go back and ask the people, ‘What do you want?’”

Williams said getting input on what is needed is a valuable part of the sales tax.

“I don’t know that I’m ready and I don’t think all of this can be drafted by tomorrow,” Williams said. “I think time frame is an issue. I can’t tell you I like Version 1 or 2 tonight.”

Williams said the way the funds flow is confusing for the public, and the educational process cannot happen by tonight. He continues to support an August vote.

“I think the public deserves the right to vote on something in April,” Council member Greg Jungman said. “I think Version 1 protects the public the best.”

Joy Hampton




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